Bankruptcy Attorney Indiana

Today's bankruptcy blog reader's question is about IRS collectors.  It's a big challenge, stopping IRS collectors. Fortunately, my colleagues (the Indiana bankruptcy attorneys who work in the Mark Zuckerberg bankruptcy law offices) and I know that the new bankruptcy laws in Indiana offer remedies even when it comes to tax debt.

First, let me review the 5 conditions (for federal tax debt to be eligible for discharge under bankruptcy, these things need to be true):

• Due date of the tax return must be at least 3 years earlier than the bankruptcy filing.
• There must have actually been a tax return filed at least 2 years earlier than the bankruptcy
• The tax assessment that the collectors are after must be at least 240 days old.
• The tax return isn't fraudulent.
• The taxpayer isn't guilty of intentional tax evasion.

Whether or not your tax bills meet all the conditions for total forgiveness or discharge by the bankruptcy court, there's still a good chance that filing bankruptcy can be of some help.

When there is tax debt In a Chapter 7 bankruptcy, debts not discharged are assigned priorities for repayment.  Since secured creditors are at the top of thepriority list, the tax debt, which is unsecured, will be near the bottom of the list.  You might remain liable for payment at the conclusion of the bankruptcy, but you'll have time to work out a plan of attack.

In a Chapter 13 bankruptcy, the bankruptcy judge has the power to "cram down" or discount some debts, or at least create an installment plan for paying the tax debt over a five-year period while stopping penalties and interest from building up.

Remember that the automatic stay of bankruptcy puts an immediate halt to collection efforts by creditors, and that includes tax collectors!